Marine sediments of the Medicine Hat Formation and First White Speckled Shale in the subsurface of southeastern Alberta reflect the influence of relative sea-level fluctuations during the Santonian Stage of the Upper Cretaceous in the Western Canadian Sedimentary Basin. A pause, or minor regression, within the overall transgression associated with the Upper Colorado Group resulted in deposition of coarsening-upward Medicine Hat Formation sandstone units as shallow shelf, sand bodies. As the transgression resumed, finer grained marine siltstone and mudstone of the First White Speckled Shale was deposited. Within this unit a previously unnamed sandstone interval (Sweetgrass Member) was identified in part of the study area. Paleontological data show that this sandstone is younger than the Medicine Hat sandstone with which it has been previously correlated. The Sweetgrass Member is a result of a minor shallowing episode during the overall sea-level rise and deep-water conditions associated with the First White Speckled Shale. During deposition of the First White Speckled Shale, localized shallowing increased input of detrital material in the water column, which prevented planktic foraminifera from thriving and caused a reduced nannofossil diversity. Within the Sweetgrass Member this is reflected in a decrease of total organic matter and a shift from Type II to Type III organic matter. Combined evidence suggests the presence of a bathymetric feature, probably related to the Sweetgrass Arch, which caused localized shallow water sedimentation within a relatively deep Santonian basin. Porosity in both the Medicine Hat Formation and Sweetgrass Member ranges from 10 to 14 per cent and permeability is generally less than 1.0 md. The Medicine Hat sandstone is an active exploration and production target, particularly in the Medicine Hat Gas Field. The Sweetgrass Member has hydrocarbon entrapment potential and may represent an opportunity of bypassed pay.